Taubman Rejects Takeover Offer From Simon Property

Taubman Centers Inc. said Wednesday that its board rejected an unsolicited $1.5-billion takeover offer by North America’s largest shopping mall owner, Indianapolis-based Simon Property Group Inc.

Shares of Taubman, which said it has no interest in further discussions of a deal, nonetheless rose 12%, as some investors apparently bet the company could be forced into a merger.

Both companies have malls in Southern California. Bloomfield Hills, Mich.-based Taubman owns Beverly Center in Los Angeles and Simon owns the Shops at Mission Viejo and Brea Mall, among others.

Simon Property’s offer valued Taubman Centers at $17.50 in cash per common share. The offering price would total $920 million.

Simon Property also proposed to negotiate the acquisition of Taubman operating units valued at $550 million.

“Our all-cash offer would deliver to Taubman shareholders a substantial premium -- approximately 18% above [Tuesday’s] closing price and 30% above the price on the day we initially made our offer,” Simon said. “And it exceeds the highest price at which Taubman shares have ever traded.”

Taubman issued a statement saying its board “unanimously concluded that Taubman Centers has no interest in pursuing a sale transaction, and that discussions regarding such a transaction would not be productive.”

The statement also said the Taubman family is not interested in selling the company.

Shares of Taubman closed at $16.59 on the New York Stock Exchange, up $1.79. Simon shares declined 85 cents, or 2.5%, to $33.10, also on the NYSE.

Simon Property’s takeover offer was the latest attempt at consolidation in an industry that has experienced several acquisitions in recent months, said a spokeswoman for the International Council of Shopping Centers, an industry trade group.

Simon owns or has an interest in 249 properties totaling nearly 186 million square feet in 36 states.